Most European stock markets slump

February 07, 2013 - 6:21:02 am

A woman walks in front of a share price board in Tokyo, yesterday. Tokyo’s benchmark Nikkei 225 index soared more than 3 percent as the yen plunged on surprise news that the head of the Bank of Japan would quit early.

LONDON: Most major European stock markets fell yesterday but London eked out a gain as shares in the Royal Bank of Scotland rose despite the bank facing big fines over the Libor rate-rigging scandal.

London’s FTSE 100 index of top companies bounced back into the black in late trades to close with a slight gain of 0.20 percent to 6,295.34 points.

Frankfurt’s DAX dropped 1.09 percent to 7,581.18 points however, and in Paris the CAC shed 1.40 percent to 3,642.90.

In foreign exchange deals, the European single currency slid to $1.3526 from $1.3582 late on Tuesday in New York.

“Investors are not inclined to take chances and are shunning risky stocks because they are asking themselves questions about the situation in the eurozone,” said Saxo Banque analyst Andrea Tueni.

US stocks were slightly softer in midday trading, with the Dow Jones Industrial Average down by a mere 0.05 percent, the S&P 500 index also dipping 0.05 percent and the tech-rich Nasdaq Composite unchanged.

Gold prices edged up to $1,674.25 an ounce from $1,673.50 on the London Bullion Market yesterday.

Shares in Royal Bank of Scotland jumped by 1.36 percent to 342.1 pence however after the lender said it had agreed to pay $612m to US and British regulators to settle allegations of trying to rig the key Libor interest rate.

The biggest German bank, Deutsche Bank, has suspended five more employees, for a total of seven, who were suspected of having participated in the rate-rigging scheme, Dow Jones Newswires reported, citing sources close to the matter.

The company stumbled into the red last year with a net loss of $3.72bn largely owing to costs related to Europe’s economic strains, said ArcelorMittal, adding that it envisaged a rebound this year.

Asian stock markets mostly closed higher yesterday following big losses in the previous session, with Tokyo surging as the yen tumbled after Bank of Japan governor Masaaki Shirakawa said he would step down early.

Tokyo soared 3.37 percent to 11,463.75 points — the highest close since September 2008 soon after the collapse of US bank Lehman Brothers and at the height of the global financial crisis.

Japanese foreign exchange traders welcomed Shirakawa’s announcement that he would step down on March 19, about three weeks before the end of his term.

It fuelled expectations that Prime Minister Shinzo Abe would likely fill the post with someone who shares his ideas on aggressive monetary easing that would see more yen pumped into the economy.